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A Dangerous Precedent: The Price of Paying Ransom for Hostages in Iraq

German nationals in Iraq have reason to be both comforted and disturbed by reports (in Der Speigel magazine and on ARD public TV) that Berlin broke precedent and paid ransom money directly to insurgent groups to secure the release of two engineers this week. German ex-pats can take solace in knowing that, if captured, there may be a monetary incentive in not beheading them on camera. At the same time, Germans are likely to become increasingly prized targets, potentially leading to a spike in abductions.

But next time?

At that point, will Germany continue the payments, furthering the crisis, or will the policy’s lack of efficacy lead to a reversal and the bloody sacrifice of future hostages? Will the government consider paying ransom only in Iraq, or in other global hotspots as well? Whatever the answers to these questions – and although this would be difficult to explain to the released captives – the strategic outcome looks gloomy for both German citizens and companies with interests in Iraq and beyond: in Nigeria, Afghanistan, Pakistan, and every other place where restive groups may look to cash in.

Cruel but Vindicated

Against this backdrop, the U.S. government’s long-standing declaratory policy of refusing to negotiate or barter with terrorists over hostages – however cold-hearted and unfeeling – appears justified. While the sentimental and PR value of capturing an American will remain an impetus to their abduction, at least they can know there is no additional financial motivation in doing so. No matter, some will say: simply being American is enough in some parts of the world.

– DML

Of note: In 2003, German companies spent 190 million Euros of FDI and imported 675 million Euros of products, much of it petroleum, from Nigeria. While imports “dropped sharply” in 2004 (the latest year for which figures were available) according to the German Foreign Ministry, firms doing business in the Nigerian delta – where much of the country’s oil is found and where MEND (Movement for the Emancipation of the Nigerian Delta), among others, has recently ramped up kidnapping and extortion efforts – should be acutely aware of the risks engendered by claims of ransom payments in Iraq.